Toys ‘R’ Us went into bankruptcy and shuttered all U.S. stores, thanks to years of mismanagement and a failure to embrace a digital strategy in the face of online giants like Amazon. However, executives recently announced a comeback: the chain will relaunch as Tru Kids. While details are under wraps, investors have promised a prioritization of omnichannel technology and an improved in-store experience.
Retail is already a fiercely competitive space and specialty brands like Toys ‘R’ Us are in even more danger of failing again. While rebranding won’t guarantee success, the company has been given another chance to modernize the shopping experience for consumers across online, mobile and in-store.
Here are several ways Tru Kids (and other struggling legacy retailers) can improve chances of survival in a crowded, rapidly changing space:
1. Embrace data to more efficiently drive consumers in-store
In order to thrive in the digital age, brands need to use data to their advantage, and nothing paints a more cohesive audience picture than location data. Brands need to have a holistic understanding of how, when and where a consumer shops in order to identify what motivates purchase, and location provides crucial insights that allow retailers to go beyond generalizations of consumer behavior and develop personalized experiences to drive customers into stores. Because — contrary to popular belief — the brick-and-mortar store still matters. A study we conducted on the consumer path to purchase showed that 31% of people reported that in-store browsing remains their primary product discovery channel for ideas and inspiration.
2. Make m-commerce as essential to sales strategy as e-commerce
One of the biggest missteps that led to Toys ‘R’ Us’ initial bankruptcy was that it could not evolve into an omnichannel retailer that prioritized online and mobile commerce. In 2019, it’s particularly impossible to stay relevant without having some sort of mobile commerce strategy, as more and more consumers are using their mobile devices not only to consume content but also to make purchases. During last year’s holiday shopping season, Black Friday and Cyber Monday generated $14.1 billion in online revenue; one-third of these purchases came from mobile devices. Brands that aren’t prioritizing m-commerce are opening up a significant percentage of potential revenue to their competitors, and with 52% of consumers saying that a bad mobile experience makes them less likely to engage with a brand, it’s critical to get mobile right.
3. Treat every day as if it’s the holiday shopping season
The period between November 1 and Christmas Eve has traditionally been viewed as the busiest and most lucrative for retailers, but when you look at consumer shopping behaviors, the reality is that consumers are buying gifts throughout the year (out of the 2,000 people we surveyed, only 9.2% of respondents indicated they actually buy holiday gifts on Cyber Monday) and will prioritize an early gift when the price is right. While the holiday seasons are historically successful and should remain a priority, it’s vital for Toys ‘R’ Us (and all retailers today) to start planning against what consumers actually want based on data, rather than continuing to maintain traditional models simply because that’s how it’s always been done.
With another chance at success, Toys “R” Us needs to do now what it was unwilling to do before: transform. We’ve seen it time and time again the past few years, and not all brands will be lucky enough to get a second chance. Anyone hesitating on digital strategies that integrate e-commerce and m-commerce into all parts of their business will fail. But the retail outlook is optimistic, as last year’s holiday season saw the highest number of sales in over six years.
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